My appraisal came in really low. What now?

Asked by Jana Florek, Strongsville, OH Thu Jun 28, 2012

My home was appraised in 2009 at $234,000. I'm refinancing that loan at 3.6% which is lower than the 5.25% I'm at now. However, I need to finance 164,000 loan balance. The new appraisal came in at $202,000. I feel as though it's extremely low! What do I do now?

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Gregorio Den…, , San Diego, CA
Thu Jun 28, 2012
Pay $2400 at closing to get to 80% LTV. It would be silly to pay mortgage insurance when you are at 81% LTV. Or, you can try again with a different lender and get a new appraisal. The suggestion that you make a one time payment to buy out the mortgage insurance is ridiculous when $2400 buys it out as well and actually reduces the principal. Buying out the MI is TERRIBLE advice!
0 votes
Excellent, looks like you are getting a good rate too so congrats!
Flag Fri Jun 29, 2012
After not sleeping last night, this is exactly what I decided to do. Paying a one time MI is as you said TOTALLY ridiculous as it won't go toward anything. Plus, the thought of starting all over again with a new broker or bank makes me sick. Thanks Denny :-)
Flag Fri Jun 29, 2012
, ,
Thu Sep 27, 2012
Good afternoon Jana,

You'll need to discuss either with your existing Lender or with a local Mortgage Banker if you qualify to refinance under the HARP program. There is a provision in recent guideline updates that will allow you to refinance if your home is less worth than the balance on the loan.

Trevor Curran
NMLS #40140
0 votes
Robert Erney, Agent, Cleveland, OH
Tue Sep 25, 2012
Ya i can set you up with some one that will have a better opinion contact me anytime!!
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James Deskins, Agent, Worthington, OH
Fri Jun 29, 2012
Sometimes you can contest the appraisal and maybe get a second opinion. I'd try that route.
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Lenderbradfo…, , Cleveland, OH
Thu Jun 28, 2012
Jana, I suspect your issue is financing more than 80% of the value of the property in order to avoid paying mortgage insurance. Based upon the numbers you presented, one option would be is to reduce the amount of your loan to the 80% LTV ($161,600). The other option is to look at paying a monthly mortgage insurance premium until you reach the 80% LTV. Another option would to be to pay a one time Mortgage Insurance Premium. I am supprised your loan officer has not presented these options to you. Because I am local, I would be glad to discuss your options with specific costs of the monthly or one time premium.
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Duane Johnst…, Agent, Uniontown, OH
Thu Jun 28, 2012
You still should be able to refi even tho the new appaisal came in lower than the 2009 appraisal. We have lost between 15 and 20 percent in home valuse over the last 4 or 5 years so it looks like you lost about 15 percent which is not as bad as what others have lost. If you feel that appraisal is lower than what you feel it should be, talk with your bank, they may order another one. But like I said as long as they are still willing to refi, I would just move ahead and hope that the market comes back over the next few years.
Good Luck,
Duane Johnston,
Howard Hanna Real Estate
0 votes
Ron Thomas, Agent, Fresno, CA
Thu Jun 28, 2012
The Bank will only finance 80% of the Appraised Value;
$202,000 x 80% = $161,600

You can either accept that,
or find a new Lender and start all over.

Some say that you can contest the Appraisal, but that doesn't hold much promise.
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